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You want to buy a car. Assume that you decide to finance the vehicle and that you can afford $250 per month at a rate of 4.5% financed over 5 years. The bank requires a 20% down payment and your savings is currently earning a rate of 2% in your money market account.

a. Describe the benefits of saving your money and paying cash for a car.

b. Calculate your personal weighted average cost of capital.

c. Calculate the maximum amount of your vehicle that can be financed.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92774595

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